IDEAS home Printed from https://ideas.repec.org/h/pal/palchp/978-0-230-23949-4_7.html
   My bibliography  Save this book chapter

Uruguay 2002–3: Recovery from Economic Contagion

In: Successes of the International Monetary Fund

Author

Listed:
  • Steven Seelig
  • Gilbert Terrier
  • Carlos Steneri

    (Government of Uruguay)

Abstract

In early 2002, Uruguay faced a classic case of financial contagion. A traumatic economic crisis in its neighbor, Argentina, triggered withdrawals of deposits from Uruguayan banks that gradually crippled the country’s banking system and caused other severe economic problems. Within seven months, withdrawals by Argentine citizens of their deposits in Uruguayan banks and fears of Uruguayan citizens that their savings were no longer safe caused bank deposits to fall by half, an unprecedented amount in recent international experience. The Uruguayan peso was floated by mid-year, which, in the context of rapidly depleting foreign reserves, led to a sharp depreciation. As a result, bank and corporate balance sheets, in which foreign currency liabilities were high, deteriorated sharply, and the value of the stock of predominantly foreign currency-denominated public debt doubled in domestic currency terms. In turn, this raised questions about the government’s ability to honor its obligations. Economic activity contracted by over 10 percent, and unemployment soared to nearly 20 percent.

Suggested Citation

  • Steven Seelig & Gilbert Terrier & Carlos Steneri, 2009. "Uruguay 2002–3: Recovery from Economic Contagion," Palgrave Macmillan Books, in: Eduard Brau & Ian McDonald (ed.), Successes of the International Monetary Fund, chapter 7, pages 125-146, Palgrave Macmillan.
    • Handle: RePEc:pal:palchp:978-0-230-23949-4_7
    DOI: 10.1057/9780230239494_7
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pal:palchp:978-0-230-23949-4_7. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.palgrave.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.